Charlie Rose spoke with Blackstone Chairman and CEO Stephen Schwarzman this past June 19th. Blackstone is the largest alternative investment manager in the world, and this 32 minute interview is the best look at one of the world’s most successful financial salesman that most of us are ever going to get.
Blackstone, also the world’s largest real estate investor, continues to be bullish on US housing (from 21:00). “We’ve already made a good sized journey up from the bottoms but there’s a lot lot more to go… We’re very optimistic about this asset class and it’s turned out to be so.”
At 24:30, Schwarzman discussed Blackstone’s returns, stating than pension funds could repair their track records by investing with his firm. “At the moment, we’re in a pretty advantageous position because not only are they giving more money to our asset class but they’re simplifying the number of managers they give money to, so they’re giving it to the better performing managers… So for us, we’re finding it pretty easy at the moment to be raising funds… For which I am eternally grateful,” Schwarzman said at 25:30.
The rates of return on private equity tend to be much higher than hedge funds, according to Schwarzman (27:38). “The reason is that you have control of businesses or control of real estate. You can change the management or business strategy, and it’s not passive…”
At the 28:45 mark Schwarzman explained his investing psychology. The first rule of investing is not to lose money. “Secondly, look for upside that if you make certain changes in a company not only can you do well, but you can do very well.”
The first half of the interview focuses on philanthropy, with the second half more focused on business, and being a worthwhile study for any financial salesperson.